Crypto / VDA Tax
Calculator India FY 2025-26

30% flat tax on gains from transfer of Virtual Digital Assets (VDAs) under Section 115BBH of the Income Tax Act, introduced by Finance Act 2022 effective 1 April 2022. Plus 4% Health & Education Cess (effective rate 31.2%) and applicable surcharge if total income exceeds slab thresholds (10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr — note: surcharge on VDA-related tax capped at 15% per Finance Act 2023). Includes ALL gains — short-term and long-term holding don't matter, ALL VDA gains are taxed at the flat 30%. Applies to cryptocurrencies (BTC, ETH, etc.), NFTs (with certain exclusions), and other tokens defined under Section 2(47A) of the Income Tax Act.

Section 194S Tax Deducted at Source (TDS) introduced 1 July 2022. 1% TDS deducted on every TRANSFER of a Virtual Digital Asset (buy AND sell — exchanges handle both sides). Applied by the buyer or exchange platform at the time of payment. Threshold: ₹50,000 per FY (₹10,000 for 'specified persons' — those required to maintain books of accounts under Section 44AA, e.g., professionals with higher turnover). Below the threshold, no TDS applies. TDS appears on Form 26AS / AIS — refundable via tax return if total tax liability is less than aggregate TDS deducted. Crypto exchanges (CoinDCX, WazirX, etc.) automatically deduct and remit. Peer-to-peer transactions require the buyer to deduct and remit.

Only within the same FY against OTHER VDA gains — and even that is restricted. Section 115BBH(3) explicitly DISALLOWS offset of VDA losses against any other head of income (salary, business, rental, etc.) AND prohibits carry-forward of VDA losses to future years. So if you lose ₹2 lakh on Bitcoin and gain ₹3 lakh on Ethereum in the same FY, you'd pay 30% on the full ₹3 lakh Ethereum gain (the Bitcoin loss does NOT reduce it). Within-FY offset of one VDA loss against another VDA gain is allowed in practice but explicit guidance is limited — many CAs treat each VDA as a separate transaction. This contrasts with equity LTCG/STCG where losses can be carried forward 8 years (Section 74).

Only the purchase price paid (in INR, fiat equivalent) is allowed as cost of acquisition under Section 115BBH. NO other deductions allowed: no transaction fees, exchange fees, gas fees, wallet fees, brokerage, internet costs, electricity costs for mining, depreciation on mining equipment — NONE of these are deductible against VDA gain. For crypto received via airdrop, fork, or as payment for services: cost = fair market value at receipt (taxed as income from other sources at slab rates, not VDA). Subsequent sale of those tokens: cost = FMV at receipt; gain = sale price − that FMV; taxed at 30%. Crypto-to-crypto swaps are treated as two separate transactions: sale of token A (taxable gain) + purchase of token B (cost = INR value at swap).

Airdrops and forks are TWO-STEP taxable events: (1) Receipt — fair market value on the date of credit to your wallet, taxed as 'Income from Other Sources' under Section 56 at slab rate (5%/10%/15%/20%/25%/30% depending on total income). (2) Subsequent sale — gain = sale price − FMV at receipt; taxed at 30% flat under Section 115BBH. For airdrops with zero market value at receipt (very new tokens not listed anywhere), cost basis is zero and full sale proceeds are taxed at 30%. Hard forks (like Bitcoin Cash from Bitcoin in 2017) treated identically — receipt at FMV taxed as income, subsequent sale taxed at 30%. Maintain records of the date and FMV at the time of each airdrop or fork.

NFTs (Non-Fungible Tokens) are Virtual Digital Assets under Section 2(47A) — same 30% flat tax on gains. EXCLUSION: NFTs based on tangible underlying assets (e.g., NFT representing ownership of physical art, real estate, vehicle) may NOT be VDAs — they may be taxed under capital gains rules instead. Most digital-only NFTs (PFPs, art, music, virtual land in Decentraland/Sandbox) are VDAs. CBDT notification 2023 clarified some boundaries but ambiguity remains for hybrid NFTs. Gain calculation same as crypto: sale price − cost of acquisition (in INR). 1% TDS applies on NFT transfers above ₹50k threshold. NFT minting costs (gas fees) NOT deductible. NFT royalties from secondary sales: taxable when received.

Schedule VDA in ITR-2 (capital gains) or ITR-3 (business income). Specify: (1) Date of acquisition, (2) Date of transfer, (3) Cost of acquisition (in INR), (4) Sale consideration (in INR), (5) Gain/loss, (6) Crypto exchange used, (7) Wallet addresses (for self-custody). For trading volume above ₹10 crore turnover, treatment may shift to business income (Section 44AB audit applicable). Most retail traders report as capital gains under Section 115BBH. ITR-1 (Sahaj) does NOT support VDA reporting — must file ITR-2 or higher. Filing deadline: 31 July (non-audit) or 31 October (audit). Late filing penalty up to ₹5,000. Match Schedule VDA entries to TDS shown in Form 26AS / AIS.

Yes, but with caveats. Gifts of VDAs to specified relatives (spouse, parents, siblings, lineal ascendants/descendants, in-laws under Section 56(2)) are NOT taxed in the recipient's hands at receipt. However: (1) Cost basis in recipient's hands = donor's cost basis (carryover cost — Section 49(1)). (2) Subsequent sale by recipient: 30% tax on gain calculated from DONOR'S original cost basis. (3) Holding period: includes donor's holding period (Section 2(42A) Explanation 1). (4) Income clubbing: gifts of VDA to spouse may trigger income clubbing under Section 64(2) — earnings from the gifted asset clubbed back to the donor. Gifts to non-relatives above ₹50,000 are fully taxable as income from other sources in the recipient's hands.

Two-step tax treatment: (1) Mining/staking REWARD receipt: taxed as Income from Other Sources at slab rate (Section 56) at FMV on the date of receipt. (2) Subsequent SALE of the mined/staked tokens: 30% flat under Section 115BBH on gain = sale price − FMV at receipt. So mining is doubly taxed — once on receipt at slab, then again on disposal at 30%. Mining electricity, hardware depreciation, internet, etc. are NOT deductible against the VDA gain (Section 115BBH(2)) — they may be deductible against the mining INCOME under business income rules if mining is a business (Section 44AA threshold), but reporting must shift from VDA capital gains to business income — complex compliance trade-off. Staking via centralized exchanges (Binance Earn, etc.) typically treated as mining for tax purposes.

Mechanics-based answer (not advice): VDA tax structure heavily disincentivizes trading: 30% flat + 1% TDS per transaction = effective ~32-33% on gains regardless of holding period, no loss carry-forward, no expense deductions. Compared to equity LTCG (12.5% above ₹1L gain) or business income (slab rate with deductions), VDA is among India's highest-tax asset classes. For long-term holders: holding past the introduction of more favorable rules (if ever) is risk-vs-reward — Budget 2024 and 2025 maintained VDA structure unchanged. Holding in offshore exchange / cold wallet: still taxable in India for residents — non-disclosure attracts penalty under Black Money Act 2015 (up to 120% of undisclosed amount plus prosecution). NRIs not subject to Section 115BBH on India-sourced VDA only — their global VDA taxed in their country of residence.